Wednesday, September 20, 2006

Not content with just skimming cream off the top, UBS Bank (Canada) is now hoping to steal a hefty portion of this country's wealth-management pie from the big banks.

The Canadian arm of Swiss-based UBS plans to take a bigger bite out of the high-net-worth market, having swiped a decent piece of the ultra-high-net-worth market. But a key hurdle as it goes head-to-head with the domestic banks is overcoming a lack of brand recognition.

The UBS name has made inroads among Canada's ultra-high-net-worth individuals — the roughly 2,500 Canadian families that have $50 million or more — UBS Bank (Canada) chief executive Grant Rasmussen said in an interview from Switzerland, where he was at a corporate retreat.

"What we're finding now, the higher the end of the market that you deal in, the more the brand is recognized," he said. "And then, where we're really trying to grow our brand is more in what I'll call just the traditional high-net-worth market."

That's the 700,000 or so Canadians who have between $1 million and $50 million.

UBS has been offering private banking in Canada since 1951, but originally focused on investment banking and corporate banking. It began emphasizing wealth management in the late 1990s.

Last year, Euromoney magazine ranked UBS Bank (Canada) the best private bank for the ultra-high-net-worth, which the magazine defines as those with $30 million or more. Managing money for people in that market is about more than just investment accounts, Rasmussen said.

UBS has experts in collectables and alternative investments such as art banking (buying or selling private art collections), aircraft financing and wine banking.

Wine banking caters to families or individuals who want to buy or sell a vineyard: "If I was going to buy a vineyard, and I was looking at Australia versus the Mendoza region in Argentina versus the Niagara region in Canada, how do they compare and what do I pay?" explains Rasmussen.

"To have a separate group for managing money for people with $50 million plus doesn't exist in the banks," he said.

Rasmussen declined to identify the number of clients UBS has, saying only: "it's far and away the fastest growing part of our business." But he acknowledges that UBS doesn't have the biggest piece of the pie. Even in the ultra-high-net-worth market, brand awareness is an issue.

"We're ranked Number 1 in terms of what I'll call expertise, but we're still dealing with the awareness issue of trying to grow our brand in Canada," he said. "A lot of those folks are still used to dealing with what I'll call a retail bank, and are just starting to find these alternatives."